Diversity Startups Venture

Hey, VCs: Here Are 3 Mistakes You’re Making In Pitch Meetings With Immigrant Founders

By Semyon Dukach

In the United States, roughly 80% of graduate students studying computer science and electrical engineering are international students. The skills they acquire here, however, are increasingly being taken to countries like Canada, Australia and the United Kingdom, where immigration policies aimed at recruiting talent are more appealing.

This should come as no surprise. The chances of winning the H1-B visa lottery are now just 1 in 7. Consequently, less than 25% of international students stay after earning their master’s degree.

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By overlooking these would-be immigrants, the U.S. is undermining its own potential and jeopardizing its future as a global leader in innovation. I believe fellow venture capitalists are doing the same.

Based on my experience investing in immigrant founders, I’ve noticed three mistakes VCs make in pitch meetings that lead to promising founders slipping under their radar:

Not digging into founder background stories

Most founders, native- and foreign-born alike, are innovators who would focus solely on their tech if they could. While they have also learned the importance of go-to-market strategies and business models, most prefer to leave their personal stories out of it.

Semyon Dukach, founding partner and managing director of One Way Ventures
Semyon Dukach

When it comes to immigrant founders, however, personal stories tend to reveal the exact qualities needed to survive in times of economic uncertainty. Many have overcome economic or governmental instability, learning a new culture and language, and starting from ground zero.

With most SaaS companies taking roughly nine years to successfully exit, you need to ensure you’re investing in someone with the ability to persevere in the face of adversity, has the resilience and flexibility to pivot when necessary, and has the determination to succeed against all odds.

Learning more about a founder’s background is going to help you determine if they have what it takes to make it when times get tough.

Getting caught up in showmanship

I find that immigrant founders are often not as good at “selling themselves” as natives.

Sometimes this is cultural — there are societies in which bragging is unacceptable. Or it may be self-protection: better to under-promise and over-deliver. Whatever the cause, as a VC you may need to prompt these founders in order to hear the full scope and scale of their vision. If you’re feeling underwhelmed, ask them about their best case scenario in 10 years, or the total size of the potential market.

From my experience, immigrant founders are less likely to build marginally life-improving products like luxury brands. Instead, they build businesses that have a reason to exist in people’s lives even when budgets are tight all around.

Products that match the market climate should far outweigh idealistic promises from a showman.

Putting too much weight in Silicon Valley networks

No one has ever argued against knowing the right people, especially when fundraising. However, what immigrant founders may lack in local networks, they make up for in their ability to navigate unfamiliar systems and their communities abroad.

To succeed in a new country with a completely different society, culture and language requires a wide breadth of “soft skills” that can’t be underestimated. This kind of cultural fluency is highly advantageous when it comes to exploring different demographics for product market fit.

Now that founders need to stretch their runway further than ever, immigrant founders can easily bring down overhead costs by hiring staff in their home countries without sacrificing team cohesiveness. Shared language, culture and mission makes remote work more engaging.

More than half of the most successful startups in the U.S. were founded by immigrants, don’t let cultural differences keep you from a smart investment.

Semyon Dukach is founding partner and managing director of One Way Ventures, a VC firm funding exceptional immigrant founders. A refugee from the Soviet Union, he is the former managing director of Techstars (Boston), and an angel investor in more than 100 companies.

Illustration: Dom Guzman

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